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Ats International Services, Inc. v. Kousa International, LLC

United States District Court, D. Maryland

May 1, 2014

ATS INTERNATIONAL SERVICES, INC. Plaintiff,
v.
KOUSA INTERNATIONAL, LLC, et al. Defendants.

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

This case arises out of a series of shipping contracts between ATS International Services, Inc. ("ATS") and Kousa International, LLC ("Kousa"). ATS has alleged that Kousa failed to pay for ATS's services, and ATS filed suit in order to attach certain property of Kousa's located in this district. Thereafter, Kousa filed several counter-claims. On April 10, 2014, this Court granted summary judgment to ATS on several of Kousa's counterclaims. Of particular relevance at this time, this Court granted summary judgment to ATS with respect to Kousa's first counterclaim for fraudulent inducement of contact to the extent that that claim related to certain written agreements between the parties; however, this Court denied summary judgment with respect to later shipments not covered by the written agreements. Kousa now moves this Court to reconsider its order granting summary judgment on the fraudulent inducement claim as to the written agreements. The parties' submissions have been reviewed, and this Court held a hearing on the Motion on April 28, 2014. For the reasons that follow, Defendant Kousa's Motion for Reconsideration (ECF No. 145) is GRANTED.[1]

BACKGROUND

This Court outlined the facts of this case in some detail in its April 10, 2014, Memorandum Opinion (ECF No. 133); accordingly, only a short summary is provided here.

Plaintiff ATS International Services, Inc. ("ATS") provides international marine logistic services and shipment. Defendant Kousa International, LLC ("Kousa") is involved in the wind energy business. The underlying dispute that gave rise to this litigation involved the shipment of tubular steel towers for Kousa. Kousa purchased these towers from Korindo Heavy Industry and needed to ship them from Indonesia to various ports around the world for resale to Kousa's customers. For the transactions at issue, ATS arranged for shipment of the towers on ships owned or operated by third parties including PACC Container Line Pte. Ltd. ("PACC").

At first, ATS and Kousa arranged for shipment on a case-by-case basis. However, in 2007, ATS and Kousa began to negotiate a contract of affreightment to cover Kousa's shipments of wind towers during 2008 ("the 2008 COA"). The agreement was "made on January 1, 2008" and was effective from January 1 to December 31 of 2008.

The 2008 COA defined the shipping rates to be paid by Kousa, and those rates were based upon the rates ATS had negotiated with PACC. Kousa's final contract price was based on these ATS-PACC rates plus a commission paid to ATS.[2]

Although no changes were made to the contract between ATS and Kousa, ATS and PACC signed "ADDENDUM NO. 1" to the "CONTRACT OF AFFREIGHTMENT Dated 16 December, 2007." The addendum states that:

- Effective on voyage 165x Pac Alkaid, PACC will invoice ATS at the rate levels attached as Appendix I, and ATS is to issue a debit note for the amount of 3% of ocean freight. ATS is not to create a debit note for detention.
- After reaching the first 156, 000 cbm, PACC will invoice ATS on the second tier as attached in Appendix I, and ATS is to issue a debit note for 3% of ocean freight and detention (if applicable) and an additional 5% for volume discount for all volumes exceeding the first 156, 000 cbm.

See Def.'s Resp. Mot. Summ J. Ex A, Ex. 10, ECF No. 128-3. This addendum was not disclosed to Kousa until after the commencement of this litigation.

A second COA between ATS and Kousa ("the 2009 COA"), dated May 21, 2008 and signed by Ricky Seung on May 23, 2008, was executed for the calendar year 2009. The terms of the second COA were essentially identical to those of the 2008 COA, but the listed rates were adjusted. Again, ATS subsequently amended its agreement with PACC.

Following the expiration of the 2009 COA, the parties continued to work together under a series of ad hoc arrangements. The relationship continued into 2012, and ATS invoiced Kousa for each individual shipment. By the middle of 2012, several invoices remained unpaid by Kousa.

ATS filed claims in this Court against Kousa under Rules C and D of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions on August 23, 2012 and requested a warrant of arrest and a writ of maritime attachment and garnishment against certain cargo in the Port of Baltimore. After Kousa filed security with this Court, the cargo was released. Ultimately, Kousa filed counterclaims for fraudulent inducement of contract, reformation, breach of contract, intentional ...


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